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tv   Your Business  MSNBC  November 22, 2009 7:30am-8:00am EST

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in 12 years! i once went 12 whole minutes! saving more while getting more. now, that's progressive. call or click today. the treasure secretary talks with small business owners to get their take on how to improve things. a restaurant owner gets customers to buy into his business, and cool iphone apps to help your company grow. we'll have all that and more coming up next on "your business."
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hi there, everyone. i'm j.j. ramberg, welcome to "your business," where we give tips and advice on helping your business grow. small business owners grath erd at the treasury department to meet with administration and congressional leaders on efforts to loosen funding. the day-long forum included discussions with treasury secretary tim geithner, sba head and chair of the small business committee. geithner called on banks that received government stimulus money to start increasing lending to small business. >> we need our nation's banks to put the assistance the
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government provided to the ffrngs system, to put that system to work and get back to the business of lending, helping businesses raise capital and investing in the promise of american innovation. >> kevin galvin is the owner of connecticut commercial maintenance. he was one of the small business owners participating in that forum. he joins us here. thanks for coming on the program. >> good morning. >> i'm really curious to know what were people saying on your side? what were they say iing that yo think the administration maybe didn't know already? >> i think the administration knew what we were reenforcing yesterday, the fact that small business needs funding, they need funding much faster than what they're getting now and that the conditions have changed whereas sets are not available and credit ratings are not as high as they once were. so we have to look at the credit worthiness of small business and how it relates to banking and i think there has to be a culture change. >> what was the tone of the meeting? we've been hearing small businesses can't get loans. what was new? what was the purpose, did you feel, of you being there? >> i think what was amazing
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about it was the fact that you had secretary of treasury and administrator mills working with small businesses and lending institutions for six hours nonstop in a round table discussion about the challenges we have in our own spheres. >> were you guys all saying the same thing? there were many small businesses owners there. >> small business own rs were linked in their thinking. >> did you have any suggestions? it's one thing to say, we need funds, we need funds. >> one of the things in my opinion that might be helpful is, because the issues are now very regional i think from an economic recovery standpoint, they will stay that way. my suggestion was that the sba look at going back to regional decision making and regional lending. >> because your issues -- there were people from all over the country there. did the stories -- were the stories that you were telling quite different than ones other people were telling? >> the stories were essentially the same. but the challenges were different. my challenges in connecticut
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were far different than a business owner with a line of chain restaurants on the mexican border in arizona. >> that's one of the issues i think the government really faces is that small business is not small business. it is a bunch of different kinds of things with different problems that they face. now, there were a few panels going on there. there was a small business panel, a banking panel going on at the same time. did you feel that the administration was very receptive to what you guys were saying? >> positively. they were listening intently. there was a lot of note taking. there was a lot of discussion, a lot of questioning of the panelists and attendees. >> what kind of questions? >> how is your business doing? what can we do to help your business grow? what can we do to help you sustain your business. >> it was a relatively small group of people obviously compared to the country of small businesses. do you feel like you guys were a truly representative sample? >> absolutely. it showed the entire -- actually a snapshot of the entire
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country. people from san francisco, connecticut, arizona, midwest. >> really quickly, are you optimistic after yesterday's panel? >> i'm more optimistic now than i have been in many, many months as a business owner of 30 years. >> kevin galvin, thanks for letting us in on what happened this week. we appreciate it. >> great. thank you. just hours before the small business summit in our nation's capital, goldman sachs announced it's investing $5050 million in the a plan to help small businesses. the firm is teaming up with bill their investor warren buffett to offer education, mentoring and access to funding for approximately 10,000 businesses. under the program, $50 million will go to grants, $250 million will be available for lending, and $200 million will be given to local colleges and universities for scholarships for entrepreneurs. goldman employees will serve as mentor mentors to business owners. while small business owners wait for lenders to free up money for them, some entrepreneurs have been forced
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to be resourceful. today we meet a restaurant owner, strapped by the financial crisis who came up with a very clever idea to fund his business after the banks turned him down. >> reporter: in the sleepy town of hastings on hudson, new york, at a small organic eatery called comfort, something incredible is happening. >> my family and i have been coming to comfort since its inception, since day one. >> their food is absolutely delicious, first of all. it's smoothing. it's really comfort food. it's really part of the whole culture of hastings. >> reporter: strapped by the cash crisis in the middle of a wren know investigation, john halco, the shaef and owner of comfort did something completely unexpected, he asked his customers for money. >> i thought it was a really creative idea. every time you walked in, you could see the card and i was reading about it.
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and it was very creative, kind of a hastings kind of way of approaching things. >> reporter: like so many other cash strapped businesses, he first turned to the banks for help, but no one would loan him the mon any. >> the problem plaguing small businesses is there's no more cash in the system. it's not like it's gone, but it's not available to them anymore. there's not enough money in circulation to support our business activity. so restaurants and book stores and small businesses that need cash to stay alive basically have to make their own. >> halco let his customers know their company was struggling and gave them the opportunity to invest in his business. >> if you purchase the card for $500, i'll activate the cards with $600 on it. right on the top you get 20% on your vest to be used in my restaurant. >> kind of a stroke of genius,
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like we were able to purchase a card knowing that it was a solid investment. i mean my family is going to use every bit of this in the course of the coming months. that was a guarantee. >> for those of us who have invested our hard-earned $500, we're going to make sure this place is here next week, if we got to go back there and start washing dishes ourselves. >> his resourcefulness translated into raising almost $40,000, saving his business and bridging the gap to finish his renovations, expanding the size of the restaurant. >> it's not a colossal amount of money he needed to borrow. a banker would hear this and go, $40,000? what are you talking about? in the real world, having $40,000 means finishing your project. >> with the bank cut out of the equation, there are no strings attached. >> first of all, i don't have to make any monthly payments and i don't have to worry about interest. and as far as the recouping of the money, it doesn't cost me that much to recoup it.
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basically it's the cost of food, labor. >> halko also uses the vip cards as currency for doing business with other local businesses, exchanging food for services. >> i've been bartering with people in the community. i have people working with me on my website. so we barter with the vip cards. they do work, i give them money on the vip cards. my lawyer, any time she does work for me, i give her a vip card. it works great. >> a lesson that might apply to other small businesses in these troubling economic times. >> any community that has a stake in the survival of a business there is ripe for this kind of investment. >> i think it really stems around the community because people have to believe in you to do something like this. and you really have to set roots down and make people believe in you. that's what i've done. and it feels good.
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turning your customers into investors is one very unique way to get financing. let's turn to this week's board of directors for their opinion. kimberly wisal is the editor of business week small business. jerry silverman is the founder and ceo of corporate turnaround. great to see you guys. i love this story. how can you not? there are some issues, though. >> i'm a little concerned. i agree with you, it's creative, the community comes together, everybody feels good. my concern is say, everybody decides this is what they're going to do over the holidays, they're going to use these comfort cards because they're short on cash for buying gifts. how is he going to buy food? i think he spent that $40,000 on the wren know investigation, but he has no idea when this loan is coming due. that's a little scary. >> with a bank you know i have to pay this much this month. it may be for the next four
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weekends in a row, he's not bringing in cash. >> he's solving his immediate cash flow problem which is really his problem right now, getting cash in advance of services. that's what i love about it, the brilliance how he's getting the money in. he's also giving away 20% more. his profit margin has to be at least 20% to break even. he has to have a big profit margin. usually in restaurants they have a bigger profit margin of 20%. >> i love this idea of getting the community involved. >> another way to do this, there's a restaurant in new hope, what they did was charged a membership fee essentially. what they did, if you paid for their version of the vip card, you got a swipe card to get in early. they would have an open area before the restaurant opening where you could have free coffee, kind of use it as your private office, starbucks substitute. that way they had a little more predictability about what this was going to cost them and what they'd have to shell out in coffee for everyone. >> that's offering extra
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services to your venue. >> to the other site, there's a good chance that all the customers may not use all their credits and he may have that as pure profit. >> when i graduated from business food, he wanted to open up a restaurant. he got us all to invest in it. on saturday nights, anyone who invested went to the restaurant and brought all their friends. >> he's using the money to grow, not to stay afloat. he's using it because he wants to expand and build his business. it's great. >> an amazing creative idea. >> great, great. it's time to answer some of your business questions. the first is one from the owner of a company that sells green cleaning supplies. >> as a new green business, how can we get our product -- what's the fastest way to get our product in front of the government and government agencies like schools and stuff like that to become a vendor for them? >> it's a good question. the government keeps talking about how they want to involve
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more small businesses. >> i've got two ideas. first of all, joint venture with someone else that's already in that space. maybe cut them in on the deal. they're already talking to the audience and they have all the approval. it's a little slower than if you want to do it on your own, go to the small business development centers all over the country, they give free counseling to small business owners and can help you fill out the paperwork and get you in the right direction. >> another point similar to the partnership thing that jerry mentioned, you can also try subcontracting to someone who already has a large contract with one of those organizations. while they're doing that, you can start the certification process which can be long. but it will at least get you in the door. >> and get you to eleven how. it's tricky. >> a big process. >> okay. good suggestions. let's move to a question from patricia. she writes, i have a great idea and i contacted a company which helps inventors and gave them my idea and they're very interested, but i have not signed their contract because i would have to give x amount of
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dollars now or when stipulated and i can't do that yet. should i make my own stipulations? what should i do? >> it's not clear what they need the money for. if it's a success fee, then pay it on success. if it's a consulting fee, you can shop around and negotiate it. i would want to know what she's actually for. there also is a group called investors united association which looks at a lot of these companies, some who really do help inventors but also point you away from ones who are frauds. >> i'd asked for references. >> i would be hesitant. i'd want to know their track record, see testimonials from clients, talk to some of the clients, check them out through the bbb. if they're just using them to get started, it may be cheaper to go to a patent attorney. i don't know. if they're helping with their marketing and they're a partner, are they going to be investing in the business as sfwhel is she putting up money and they are
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putting up money? or is it all her money. the next one, judy owns a home interior business that hasn't been able to cover some monthly payments. she writes i obtained my real estate license eight months ago and have sold $1 million. each client has purchased flooring and blinds from me. i believe the business model can work, but i don't think the home interior business can make it much longer unless the economy improves. i don't want to acquire more debt. exclamation point? >> i'm a bit of a debt expert, helping small businesses get out of debt. i see this as a debt problem. you're asking questions about closing her business and the economy which we can't possibly know sitting here. we don't know enough about her business. we do know she has a debt problem and needs to negotiate better terms with her creditors to get out of this immediate cash flow crunch she's in. she can get a free copy of the 27 biggest mistakes to avoid negotiating business debts by
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going to and asking for her free copy. >> her interior design business is not doing well, cued doughs for her going out and getting new certification to build a different business. i kind of feel like she's answered her own question. she says the interior design business is not pulling its weight. can she strip that down so she's only floating the interior design business directly tied to the real es estate business? it's hard to know. seems like she could strip things down. >> is there any way she could do something so she's paying for stuff as she needs it to help the people doing the real estate? i'd hate for her to completely get rid of it when there might be great synergy with her new business. >> sounds like she's in a little too deep for what the business model is going to turn out to be. >> in some ways i would hope she is since that used to be her whole business. great advice to do.
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i appreciate it. if any of you have a question for our experts, go to our website. the address is yourbusiness spin you can hit the contact us link to submit a question for our panel. it's with more than 1,000 iphone applications available for download, there's an app for just about everything as they say on the commercial. dan ackerman senior editor for is here to show us some. this is such a fun segment. my husband got an iphone and it's fun to play with the apps. >> it's a big platform for the apps, not a lot are for business users yet. >> but there are some. you've brought examples for us. which a lot of people already use. >> if you already have it there's an iphone app you can get free from the app store that
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ties into your account. and you can access the information, the customer records, contact info and call logs. you to have that subscription for it at your job, but the app itself is free. no reason not to get it if your company is already using it. >> flight track pro? >> a great way to put in information for your flights and get updates if your plane is getting delayed. you used to have to check your e-mails see if the airline e-mailed you or checking a website on your ix phone which is hard to do. this actually lets you know if your flight is going to be delayed, if there's a weather problem at your airport. >> i type in delta air lines flight 265 and it says this is what's going on. >> it says you're on time, you're delayed. there's even a pro version that will push ub dates to you. >> what's some amazing about the good app is they're so easy to use. >> one thing people need and they do that really well. >> let's go to the next one, card snap.
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>> this is a cool one. you take a business card and actually photograph it with your webcam and takes optical character recognition and gives you a contact from your list for your contact. >> like for outlook. >> now somebody gives me a card, i can take my iphone, take a picture oft it. it will process that, it takes a little while. but it will give you the information on the card on your contacts list. it only works on the iphone gs because it has a better camera. >> that's so good. >> it's a clever idea. you may have to do a little correcting here and there. >> even with all these whack ki business cards it works? >> obviously if it's a plain text on white card, that is theest best because you're doing optical character recognition. that technology has been a round for a long time, still a little touch and go. >> the next one, skype. you have video, can talk on the phone for free and see your friends in dubai or whatever. i just spoke to my friend in dubai. that's why i thought about it.
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>> just like any popular desk top out, there's an iphone version. the iphone version of skype is pretty useful. if you're on wi-fi you can make. on the 3g network, send text. can't do the calling because of the data bandwidth issues. >> then the call is free? >> using the skype network. >> okay. >> and then tweety 2. >> twitter is a big -- not just for consumers but for business. people promote themselves, talk to customers through twitter. tweety is probably the most popular app for the iphone and for like three bucks is a robust app. send messages. check them. see who's talking about you online. you need have a twitter app on the iphone. >> are there other apps? >> there are a lot. it is an open set of development tools and anyone can make an app to read the twitter data and considered one of the cleanest,
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easiest to used ones. >> who do we keep up with the new and best ones for business? >> it is difficult because the app store is so overwhelmed by tens and tens of thousands of apps. a lot is word of mouth. >> having you on the show again. >> talking about it. >> and next month 200,000 for us. >> that's right. >> thank you so much for showing us these. >> thank you. there's more good advice ahead to help your business. we'll have tips on how to maintain cash flow in the tough economy. and you say you can't afford bonuses? we have got some creative ways to reward the employees this holiday season.
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during times like these it seems like the world will never be the same. but there is a light beginning to shine again. the spark began where it always begins. at a restaurant downtown. in a shop on main street. a factory around the corner. entrepreneurs like these are the most powerful force in the economy. they drive change and they'll relentless push their businesses to innovate and connect. as we look to the future, they'll be there ahead of us, lights on, showing us the way forward. this is just the beginning of the reinvention of business. and while we're sure we don't know all the answers, we do know one thing for certain, we want to help. come see what the beginning looks like at
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in an uncertain economy, maintaining cash flow becomes more important. so here are five tips for managing your payables courtesy of number one, always look to negotiate terms. explore ways to maximize payment terms and ask for discounts from long time suppliers. two, explore cooperative buying with other businesses who purchase similar supplies. you may be able to earn discounts for large volume purchases. three, check in with your bank about automatic payment services. paying bills automatically can ensure that outstanding bills are paid on time. four, tighten your spending. in an uncertain economy, consider all of your purchases. if you need commitment for a
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short term project, rent it or buy it used. number five, re-evaluate the existing accounts and make sure the revenue outweighs the costs. with holidays approaching, many small businesses are considering bonuses for employees. but especially this year, cash-strapped entrepreneurs may feel it's nearly impossible to give the staff the extra check so here to give us tips on creative ways to reward your employees is bar bah kirka, senior vice president for human resources for cats media group providing leadership. so great to see you. >> thank you. >> of course, every employee wants a check or cash. >> absolutely. >> so what, in fact, can you give them in place of that that will still make them feel good about it? >> employees like recognition for the work and one of the ways an employer can demonstrate that is to listen to the employee so get the employees involved in designing a reward. give them guidelines and let them run with it and whatever
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they design is right for them. >> like what would they say? we want a party or we want plastic calculators? >> no plastic calculators. really interesting group out in california designed a program. they wanted to honor the contribution of a co-worker's son serving in iraq and so they put together gift boxes for him and his friends and asked the company to supply international phone calling cards and pay for the shipping. for them that was a win. they loved it and they felt rewarded and listened to by the employer. >> that is amazing. good idea. and another suggestion you have is use credit card points so you probably rack up a lot of them as a small business. >> absolutely. you can use those to buy gift certificates for the employees and select a reward. what's meaningful to them. >> to give in that case, do you give everyone the same amount? >> you can. it probably works better that way. make sure that you include a
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note, a personal note. >> right. >> that means a lot to employees opposed to leaving it on the chair or desk. >> yeah, i think so, too. another thing you say is barter for goods or services. >> yes. that is a creative idea. say you are a day spa and there's a restaurant nearby. you can barter day spa services for a nice lunch or a nice dinner for the staff. >> think outside the office? >> think outside the office. people have spouses, partners, significant others and family and so include them in the rewards. show that you care about the entire family group of the employee. you can give a family movie tickets and a certificate for free popcorn. i know -- >> do you feel like you have to give something? >> you should give something. >> you should? >> you should give something. >> is a note enough? >> it could be depending on the employees. if that's what they value, a personal notes of thanks works really well.
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>> what about a party? is that enough of a reward? >> people love parties. >> they do? >> people love parties. i think if you can take your staff out to lunch, if you can take your staff out to dinner, that is a great thing. >> talking on the show to a lot of very small businesses. what if you just baked everyone cookies, does that count or just -- i was going to say is that just silly but maybe i got your reaction? >> i don't think it's silly at all and depends on the business and employees. if they know that you're a good baker, they'd probably it. >> if you got cut and bake the night before at 3:00 in the morning -- >> it is thought that counts. >> thank you so much. i love the first idea about something for the community. in this case, overseas. thanks so much. >> you're welcome. every business owner encounters problems from time to time. our website of the week can help you work through them. winmark is a great resource for variety of issues. browse timely articles or read
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up or topics like funding, human resources and technology and offers a community function where small business people can create profiles and communicate with each other. to learn more about today's show, click on our website, it's you will find all of today's segments and web exclusive content with more information to help your business grow. next time, a couple down to their last $18,000 with 4 kids and a mortgage puts almost all of it into their business idea. >> we weren't entrepreneurs and business people. we didn't come this across because we were scoping out the best business angle. >> how kim benson turned an idea for low fat bagels into a booming business. that's on a special start-up edition of "your business." until then, i'm j.j. ramberg, and remember, we make your business our business. i'm katrina markoff, owner of vosges haut chocolates.
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we combine chocolate with exotic roots, flowers and spices to create tastes that tell cultural stories. but in today's economy, how do you run a business that's about indulgence, - yet maintain fiscal responsibility? - ( cash register bell dings ) selling prospective clients can require more than truffles with hungarian paprika to seal the deal. so to make every dollar we spend do the most for us, we use our american express open charge card. it's the card that understands what my business needs. we use membership rewards points to visit clients and vendors all over the world. and we rely on open's concierge service to get our clients into the top hotels and restaurants. which makes us look pretty sweet. when you're selling exotic chocolates, having a card you can count on isn't a luxury. it's a necessity. announcer: today how you run your business is anything but typical. so use the card that isn't your typical credit card.


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